National Rx Track and Trace System Could Soon Be a Reality – House Passes HR 3204

With California’s electronic pedigree requirement set to take effect in 2015, we have been following recent efforts by Congress to enact a national prescription drug track and trace system (see our previous posts here, here, here, and here). The House passed a bill in June, H.R. 1919, that would create a national pedigree system and the Senate Committee on Health, Education, Labor, and Pensions (“the Senate Committee”) passed a similar bill, S. 959, in May. Then, late on September 25, 2013, leaders from the Senate and House committees overseeing health care policy announced that they reached an agreement on bipartisan and bicameral legislation (“bicameral legislation”) that would amend the Federal Food, Drug, and Cosmetic Act (“FDCA”) to address compounding pharmacies and incorporate a national prescription drug track and trace system as well as national standards for prescription drug wholesale distributors (“wholesalers”) and third-party logistics providers (“3PLs”). The House passed the bicameral legislation, the Drug Quality and Security Act (H.R. 3204), on September 28, 2013 by voice vote. A detailed outline of the bicameral legislation prepared by Hyman, Phelps & McNamara, P.C. can be found here.

The track and trace system (i.e., pedigree) set forth in the bicameral legislation would preempt state pedigree requirements and eventually create a national interoperable electronic prescription drug track and trace system. While the bicameral legislation is in many respects similar to the Senate Committee’s bill, it contains some significant differences.

The bicameral legislation provides specific track and trace requirements for manufacturers, wholesalers, repackagers, and dispensers (e.g., pharmacies) of prescription drugs. Unlike the Senate Committee’s bill, it does not require 3PLs to be responsible for pedigrees. Under the bicameral legislation, manufacturers would be required to include a product identifier number on each “package and homogeneous case” of prescription drug product they produce within four years of enactment, while repackagers would be required to include it within five years. In the meantime, the bicameral legislation requires manufacturers, wholesalers, repackagers, to provide and/or receive pedigree by January 1, 2015, while dispensers are required to do so by July 1, 2015. In addition, wholesalers would be required to accept and distribute only those prescription drug products that include product identifiers within six years, while dispensers would be required to only receive proscription drug products with a product identifier within seven years. As such, other than for 3PLs, the timelines for incorporating and distributing drug products with a product identifier for manufacturers, wholesalers, dispensers, and repackagers remains unchanged from the earlier Senate Committee’s bill.

In addition to product identifier requirements, the bicameral legislation also mandates that manufacturers, wholesalers, repackagers, and dispensers implement a system to verify that prescription drug products under their control are legitimate (e.g., not counterfeit, diverted, stolen, or otherwise adulterated). If a “suspect” drug product is determined to be illegitimate, the entity must take the necessary steps to purge it from the supply chain. Both pieces of legislation allow FDA or any trading partner to request verification from a drug’s manufacturer.

Both the Senate Committee’s bill and the bicameral legislation initially allow for pedigrees to be transmitted and maintained in either paper or electronic format. However, both bills mandate that an interoperable electronic system be implemented within 10 years of enactment. This interoperable electronic system must be able to track and trace prescription drug products at the package level in accordance with standards established through guidance. As such, FDA would be required to issue guidance documents for each of the following: 1) standards for an interoperable electronic system (within one year of enactment); 2) suspect and illegal products (within 180 days of enactment); 3) unit level tracing (within 18 months of a public meeting); and 4) revisions to the interoperable electronic system guidance (within 18 months of a public meeting). Some of these guidance documents cannot be issued before a series of public meetings which cannot be held prior to one year after the legislation is enacted. Both the bicameral legislation and the Senate Committee bill also requires FDA to establish at least one pilot program to “explore and evaluate methods to enhance the safety and security of the pharmaceutical distribution supply chain.”

The bicameral legislation also sets requirements for the licensing and operation of wholesalers and 3PLs. This includes the creation of national wholesaler and 3PL licenses in cases where states do not license such entities. However, similar to the Senate Committee’s bill, the bicameral legislation continues to allow states to collect licensing fees and direct administrative fines for wholesalers and 3PLs licensed by the state. Additionally, wholesalers and 3PLs are required to submit annual reports to FDA beginning on January 1, 2015. These reports would include information regarding each state where the wholesaler or 3PL is licensed, the name and address of each facility, and contact information. Both the Senate Committee’s bill and the bicameral legislation preempt state pedigree requirements.

The bicameral legislation appears to have the support of congressional leaders from both parties. With passage secured in the House, it is expected that the full Senate will take up this legislation soon. A national prescription drug track and trace system is closer to becoming a reality than ever before.